Tyson Foods Inc (TSN)
Interest coverage
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | -603,000 | -395,000 | 834,000 | 2,217,000 | 3,422,000 | 4,410,000 | 5,553,000 | 5,582,000 | 5,146,000 | 4,396,000 | 3,449,000 | 3,160,000 | 2,955,000 | 3,008,000 | 2,654,000 | 2,672,000 | 2,749,000 | 2,770,000 | 2,981,000 | 2,987,000 |
| Interest expense (ttm) | US$ in thousands | 376,000 | 355,000 | 345,000 | 341,000 | 349,000 | 365,000 | 385,000 | 405,000 | 418,000 | 428,000 | 449,000 | 466,000 | 475,000 | 485,000 | 484,000 | 483,000 | 483,000 | 462,000 | 426,000 | 394,000 |
| Interest coverage | -1.60 | -1.11 | 2.42 | 6.50 | 9.81 | 12.08 | 14.42 | 13.78 | 12.31 | 10.27 | 7.68 | 6.78 | 6.22 | 6.20 | 5.48 | 5.53 | 5.69 | 6.00 | 7.00 | 7.58 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $-603,000K ÷ $376,000K
= -1.60
The interest coverage ratio for Tyson Foods Inc has shown fluctuations over the past few quarters. The ratio indicates the company's ability to cover its interest expenses with its operating earnings.
The negative ratios in the most recent quarters (Dec 31, 2023 and Sep 30, 2023) suggest that Tyson Foods Inc's operating earnings were insufficient to cover its interest expenses during those periods. This could be a cause for concern as negative interest coverage ratios may indicate financial distress or an inability to meet debt obligations.
However, the company showed improved interest coverage in Jun 30, 2023 and Mar 31, 2023, with ratios of 2.42 and 6.50 respectively. This improvement suggests that Tyson Foods Inc's operating earnings were more sufficient to cover its interest expenses during those periods.
Looking at the historical trend, the interest coverage ratio has generally been on an upward trajectory since Dec 31, 2019. This indicates an improvement in the company's ability to meet its interest obligations over time.
Overall, while the recent negative interest coverage ratios raise some concerns, the improving trend over the historical period is a positive sign for Tyson Foods Inc's financial health and debt servicing capabilities.
Peer comparison
Dec 31, 2023